Collective Local Payments for Ecosystem Services: new local PES between groups, sanctions and prior watershed trust in Mexico

Payments for ecosystem services (PES) programs are now high in number, if not always in impact. When groups of users pay groups of service providers, establishing PES involves collective action. We study the creation of collective PES institutions, and their continuation, as group coordination. We use framed lab-in-field experiments with hydroservices users and providers within watersheds participating in Mexico's Matching Funds program in Veracruz, Yucatan and Quintana Roo states. We explore the coordination of contributions between downstream users and upstream providers, plus effects of different types of sanctions that can affect expectations for both users and providers. Both information alone and sanctions raise contributions overall, although outcomes varied by site in line with our rankings of ‘watershed trust’. For instance, monetary sanctions raise contributions in the watershed we ranked high in trust, yet initially lowered them for the lowest-trust watershed. This suggests that upstream-downstream social capital will be central to new collective local PES, while our overall trends suggest social capital can be raised by successful coordination over time.